The ethical trading scheme was founded 20 years ago and for the first time, sales of Fairtrade goods have fallen, as cash poor consumers favour the shopping baskets at Aldi and Lidl.
Following years of double digit growth, sales have now fallen 4%, which highlights wider worries in the grocery market as consumers opt for the likable prices across discounter supermarkets. While Fairtrade products can be found at the German chains, the stock amounts to a considerably smaller proportion of their sales than in the Big Four stores and other larger supermarkets.
Fairtrade strives to protect farmers in developing countries by offering a minimum price and a premium to invest in community projects. Last year, the retail salesThe retail sales value of products overseen by Fairtrade, fell by 3.7% to £1.67bn.
Michael Gidney, Chief Executive of the Fairtrade foundation, said: “Our main concern now is that increasingly aggressive competitive behaviour in the grocery sector could undermine the volumes farmers and workers are able to sell on Fairtrade terms. This will result in real losses to hardworking families and communities in some of the poorest countries in the world.”
Recent data from Nielsen recognised that Aldi and Lidl now control more than 10% of the grocery market, who are enjoying double-digit sales growth while the larger supermarkets struggle.
Analysts have said Fairtrade was likely to have been hit as overall sales have fallen at Sainsbury’s and The Co-op which are both important outlets for the ethical brand. Sainsbury’s and Co-op bananas, coffee, tea and chocolate have all been replaced with their Fairtrade counterparts.